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TMI Blog2013 (12) TMI 1589X X X X Extracts X X X X X X X X Extracts X X X X ..... INGH, J.M. AND SHRI R.C.SHARMA, A.M. Department by : Shri R.A.Verma, Sr. DR Respondent by : Shri H.P.Verma and Ms.Sakshi Verma, Advocates ORDER R. C. Sharma, Accountant Member - This is an appeal filed by the Revenue and cross objection by the assessee against the order passed by the CIT(A), dated 18.02.2013 for the assessment year 2009-10. 2. The Revenue has taken five grounds, however, the controversy revolves around the CIT(A)'s action for treating the capital assets (Flat) sold by the assessee as long term capital asset, thereby allowing assessee's claim for deduction u/s 54F. 3. Rival contentions have been heard and records perused. Facts in brief are that the assessee vide allotment letter dated 22nd January, 2005, allotted a Flat No.1202 at Raheja, Tipco-I, Malad, Mumbai. As per this letter of allotment, the Builder M/s. K. Raheja Universal Pvt. Ltd., Mumbai, agreed to sell the flat to the assessee for ₹ 33,15,750/- besides other charges of ₹ 1,32,480/-. The assessee was required to sign the letter as a token of agreement with the Builder. The assessee duly signed the letter and allotment was given to assessee on 22.1.2005. Payment of ₹ 1 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... And Shri Sanjay Kumath (The Assessee & Purchaser) d. Agreement for Transfer transferring the said "right to purchase" a flat is found to have been made on 05.03.2009 during the P.Y. itself between: Shri Sanjay Kumath (The Assessee & Transferor) And M/s. Raheja Universal Private Limited, Mumbai (The Confirming Party No.1) And 4. Nirmal Bapulal Thakkar (HUF) (The First Owner) 5. Surat Bapulal Thakkar (HUF) (The Second Owner) 6. Dayal Bapulal Thakkar (HUF) (The Third Owner) And Shri Jayesh Veljibhai Gadhecha and Mrs. Divya Jayesh Gadhecha (Transferees) Since the assessee has been bestowed with "the right to purchase" the aforesaid flat on 27.02.2009 and the said right has been sold by him on 05.03.2009 during P.Y. itself, it was required of the assessee to explain as to why the rights to sale the flat under consideration should not be considered to be vested with him from the date of agreement of purchase of right i.e. 27.02.2009. e. Letter of Allotment dated 22.01.2005: In response, the assessee through its Counsel Shri Manish Mittal furnished a copy of allotment letter of said flat stating that "the assessee acquired interest in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flat only through the said agreement for sale. It may, therefore, very well be said that rights has been conferred on assessee from the date of execution of agreement for sale on 27.02.2009 and not from the date of allotment letter. j. Para- (I) of the Agreement for Transfer dated 05.03.2009 also confirm the aforesaid fact which read as under: (I) Pursuance to the negotiation between the parties hereto, the Transferor (The Assessee) have agreed to sell and transfer to the Transferee (Shri Jayesh Veljibhai Gadhecha and Mrs. Divya Jayesh Gadhecha) and the Transferees have agreed to acquire from the Transferor (The Assessee) the Transferor's right, title and interest in the said original Agreement for sale dated 27.02.2009 for a lump sum….." Evidently the Transferor (The Assessee) has been vested with the right, title and interest in the aforesaid flat from the date of original agreement (Agreement for Sale) dated 27.02.2009. k. Again, the "Developer" i.e. M/s. Raheja Universal Private Limited, Mumbai had acquired only the rights to develop from the land owners in 2003 and he had not fully paid off his agreed obligation as on the date of allotment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the appellant in respect of 'Right to purchase' i.e. date of allotment. Further I find that the appellant is also entitled to deduction u/s 54F as the entire sale consideration value of the said flat/house was invested in capital gain-CDR A/c with OBC. RNT Marg, Indore. Accordingly this ground of appeal is allowed." 5. Department is in appeal against the said order of CIT(A). 6. Shri R. A. Verma, Sr. DR, on behalf of the Revenue contended that as on the date of allotment i.e. 22.01.2005, no capital asset was existed, therefore, the ld. CIT(A) was not justified in taking the date of acquisition as on 22.1.2005. As per contention of ld. Sr. DR, the flat was acquired by the assessee only by way of agreement of purchase executed on 27.2.2009, which was sold by the assessee on 05.03.2009. Period of holding of flat by assessee was just for few days. Thus, the Assessing Officer was justified in treating the flat so sold as short term capital assets. He relied on the decisions reported at Alapati Venkataramiah v. CIT [1965] 57 ITR 185 (SC), CIT v. Dr. V.V. Mody [1996] 218 ITR 1/85 Taxman 125 (Kar), CIT v. Dr. D.A. Irani [1998] 234 ITR 850/[2000] 111 Taxman 600 (Bom.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as duly acquired by the assessee on 22.1.2005, when he was given letter of allotment which clearly described the precise number of flat so allotted to him. As per the provisions of Section 2(47)(ii) "Transfer" in relation to capital assets includes the extinguishment of any right therein. This letter of allotment extinguishes the rights of builder in the said flat in favour of the assessee in respect of this flat and by signing the letter of allotment, the assessee agreed to buy the same and for which payment was also made according to the latter of allotment. Decisions cited by ld. Senior DR are distinguishable on facts. We found that CBDT vide Circular No. 471 dated 15.10.1986 and Circular No.672 dated 16.12.1993 held as under :- "The allottee gets title to the property on the issue of the allotment letter and the payment of instalment is only a follow up action and taking the delivery of possession is only a formality." 10. Board vide circular no. 672 after referring Circular No. 471 extended the facility of exemption u/s 54 & 54F in respect of allotment of flat/house. Thus, as per the CBDT Circular also, the assessee acquired the rights/title in the flat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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